Politics with Michelle Grattan
News:Politics
As the energy crisis continues to grip Australia’s east coast with consumers told to limit their consumption and warnings of blackouts Tony Wood, director of the energy program at the Grattan Institute, speaks with Michelle Grattan about why this has happened and what can be done to fix the system.
The crisis is unprecedented, Wood says. “We’ve certainly seen situations where things have got very tight[…] But this sort of extended period when we’ve had major power outages and real stress on the entire system for such a long time has never been seen before.”
He says the crisis could have been minimised if past governments had worked to “address climate change” and “bring on more renewables” as well as all the technology to support a renewables industry.
That being said, Wood points out there are other factors also driving the crisis.
“We still would have had the weather patterns we had in the south, on the east coast of Australia, that caused all the rain and caused all the flooding of the coal mines that interrupted power supply. And of course, we wouldn’t have prevented the Ukraine war and we probably would have had real stress on the gas supply system.”
Wood argues that “things became very complicated very quickly”, as the crisis developed.
On whether the crisis is in part a result of power companies playing the system, he says: “I don’t honestly think the companies were trying to game the system, but I think the commercial arrangements were so complicated [that the Australian Energy Market Operator taking over the system] was the only solution.”
Some have suggested the crisis has been worsened because many assets have been privatised. Wood disagrees. “I don’t think this is a fundamental failure of privatisation […] I do think it’s a fundamental physical problem and government ownership wouldn’t have made much difference.”
“Transitions are always difficult things […] I think we can see where we’re going. It’s got to be a system which is overwhelmingly dominated by renewable energy.”
“In the short term, we are going to manage this transition carefully, which means as we adopt more and more renewables, we’re going to need some of these coal-fired power stations and gas-fired power stations to maintain the stability and the reliability of the system. They should only be there as necessary to support that transition.”
“I have no doubt we can move to net zero by 2050. But remember, it will be net zero. It won’t be absolute zero. And of course, the sooner we start really seriously creating momentum in that direction, the more likely we are to get there and the more likely it is we’ll get there without too much cost.”
Productivity Commissioner Danielle Wood on how to grow Australia's weak productivity
Josh Bornstein on how big companies are taking away employees’ private rights
Richard Holden says no interest rate fall likely for 12 months
Politics with Michelle Grattan: Adam Bandt on why the Greens are playing hardball on housing
Politics with Michelle Grattan: Robert French on the realities of a social media age ban
Politics with Michelle Grattan: Ghaith Krayem on Muslim votes mattering
Politics with Michelle Grattan: Reserve Bank's Andrew Hauser says don't read too much for Australia from US rates message
Politics with Michelle Grattan: Joe Hockey says Kamala Harris and Anthony Albanese share views
Politics With Michelle Grattan: Andrew Wilkie says government ‘scared stiff’ of gambling companies
Politics with Michelle Grattan: Pat Turner on Indigenous empowerment, Closing the Gap, and future Indigenous leadership
Politics with Michelle Grattan: Lester Munson on Kamala Harris’s style and a changed Trump
Politics with Michelle Grattan: Joe Hockey on how Australia should navigate a second Trump term
Politics with Michelle Grattan: Fatima Payman on the challenges and opportunities of being a crossbencher
Politics with Michelle Grattan: Chris Bowen on 'calling out' claims about the energy transition's cost
Politics with Michelle Grattan: Peter Malinauskas on political donations, kids on social media, and the nuclear option
Politics with Michelle Grattan: Clive Hamilton on how Australians must adapt to 'Living Hot'
Politics with Michelle Grattan: Andrew Norton on the Albanese government's interventionist policy to cut foreign student numbers
Politics with Michelle Grattan: Andrew Bragg flags a coalition would use 'coercion' of the states to get more new houses built
Politics with Michelle Grattan: Madeleine King on investment incentives and the pivotal role of gas
Politics with Michelle Grattan: Budget fight looms on Future Made in Australia tax breaks
Create your
podcast in
minutes
It is Free